nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2015‒05‒02
nine papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Culture of Trust and Division of Labor By Meier, Stephan; Stephenson, Matthew
  2. Social capital and the cost of credit: evidence from a crisis By Paolo Emilio Mistrulli; Valerio Vacca
  3. Culture, Institutions and Democratization By Gorodnichenko, Yuriy; Roland, Gérard
  4. Strong intrinsic motivation By Dessi, Roberta; Ristichini, Aldo
  5. The Impact of Social Information on the Voluntary Provision of Public Goods: A Replication Study By James J. Murphy; Nomin Batmunkh; Ben Nilsson; Samantha Ray
  6. Conspicuous Work: Peer Working Time, Labour Supply and Happiness for Male Workers By Collewet, Marion; de Grip, Andries; de Koning, Jaap
  7. Comparison of Social Capitalfs Effect on Consideration of Suicide between Urban and Rural Areas By Eiji Yamamura
  8. Pricing in Social Networks under Limited Information By Elias Carroni; Simone Righi
  9. Deconstructing Giving: Donor Types and How They Give By Lata Gangadharan; Philip J. Grossman; Kristy Jones

  1. By: Meier, Stephan (Columbia University); Stephenson, Matthew (Columbia University)
    Abstract: Firms exhibit heterogeneity in size, productivity, and internal structure, and this is true even within the same industry. It has been thought since the time of Adam Smith that a firm's internal structure affects its productivity through the channel of gains from specialization. Our paper provides evidence of a link between an organization's culture – specifically the trust environment – and its internal structure. We show experimentally that exogenously imposed culture endogenously leads to variation in organizational form. We prime trust using past performance from a pilot study and demonstrate that the level of trust within an organization affects division of labor and consequently organizational productivity. This evidence is consistent with a cross-country link between trust and the division of labor that we observe in data from the European Social Survey. Our results point to a mechanism that can help explain existing results on the connection between generalized trust and growth. It also points to an important determinant of a firm's internal structure: corporate culture (of trust).
    Keywords: trust, division of labor, organizational structure
    JEL: C90 D20 D03
    Date: 2015–04
  2. By: Paolo Emilio Mistrulli (Bank of Italy); Valerio Vacca (Bank of Italy)
    Abstract: Social capital is a key factor affecting the functioning of financial markets (Guiso, Sapienza and Zingales, 2004). However, the estimation of the effect of social capital on credit markets is notoriously difficult. In this paper we exploit the recent Lehman Brothers crisis and a rich dataset to investigate whether social capital shields firms from the tightening of credit conditions. We mainly focus on lending to small Italian firms that rely almost exclusively on banks’ credit and we compare the level of loan interest rates before (June 2008) and after (June 2010) Lehman’s default for a balanced sample of bank-firm relationships. We find that for firms headquartered in provinces where social capital is higher, the rise in the loan spreads following Lehman’s default was milder compared to firms located in low-social capital communities. The benefits were larger for small firms borrowing from more than one bank and for uncollateralised credit but did not extend to larger firms. Moreover, different measures of social capital provide slightly different results, suggesting a more ambiguous role for particularistic networking (e.g. having a wide network of friends) than for altruistic behaviour rooted in universalistic ethics. Finally, the propensity of a community to cooperate in the credit market, a kind of credit-specific measure of networking, did not always have an impact comparable to that for more general measures of social capital.
    Keywords: social capital, trust, SME finance, credit cooperation, financial crises
    JEL: A13 G01 G2
    Date: 2015–04
  3. By: Gorodnichenko, Yuriy; Roland, Gérard
    Abstract: We construct a model of revolution and transition to democracy under an individualistic and a collectivist culture. The main result is that, despite facing potentially larger collective action problems, countries with an individualistic culture are more likely to end up adopting democracy faster than countries with a collectivist culture. Our instrumental variable estimation suggests a strong and robust effect of individualistic culture on average polity scores and length of democracy, even after controlling for other determinants of democracy emphasized in the literature. We also give evidence that countries with collectivist culture are also more likely to experience autocratic breakdowns and transitions from autocracy to autocracy.
    Keywords: collective action; collectivism; culture; democratization; individualism
    JEL: H1 P48 Z1
    Date: 2015–04
  4. By: Dessi, Roberta; Ristichini, Aldo
    Abstract: A large literature in psychology, and more recently in economics, has argued that monetary rewards can reduce intrinsic motivation. We investigate whether the negative impact persists when intrinsic motivation is strong, and test this hypothesis experimentally focusing on the motivation to undertake interesting and challenging tasks, informative about individual ability. We find that this type of task can generate strong intrinsic motivation, that is impervious to the effect of monetary incentives, particularly when the individual is "racing against himself". In our experiments, monetary incentives have no significant impact on performance. In a second experiment using the same kind of task but a setting designed to weaken intrinsic motivation, monetary incentives do have a significant, positive, effect on performance. This result confirms that our experimental setup may, with appropriate conditions, replicate the known crowding out effects.
    Date: 2015–04
  5. By: James J. Murphy (University of Alaska Anchorage, Nankai University, Chapman University); Nomin Batmunkh (University of Alaska Anchorage); Ben Nilsson (University of Alaska Anchorage); Samantha Ray (University of Alaska Anchorage)
    Abstract: Shang and Croson (2009) found that providing information about the donation decisions of others can have a positive impact on individual donations to public radio. In this study, we attempted to replicate their results, however, we found no evidence of that social comparisons affected donation decisions. Most of our donors were renewing members, a group which Shang and Croson also found were not influenced by social information.
    Keywords: Charitable giving; field experiment; philanthropy; public goods; social information; social comparison
    JEL: D64 H41 C93
    Date: 2015
  6. By: Collewet, Marion (Maastricht University); de Grip, Andries (ROA, Maastricht University); de Koning, Jaap (Erasmus University Rotterdam)
    Abstract: This paper uncovers 'conspicuous work' as a new form of status seeking that can explain social interactions in labour supply. We analyse how peer working time relates to both labour supply and happiness for Dutch male workers. Using a unique measure of peer weekly working time, we find that men's working time increases with that of their peers and that peer working time is negatively related to men's happiness. These findings are consistent with a 'conspicuous work' model, in which individuals derive status from working time.
    Keywords: well-being, social norms, working hours
    JEL: J22 I31 D62
    Date: 2015–04
  7. By: Eiji Yamamura
    Abstract: An increasing number of works have addressed the socio-economic determinants of suicide. Social capital is a key factor in preventing suicide. However, little is known about the experience of suicide consideration using subjective values. From the viewpoint of suicide prevention, it is worth examining how people think of suicide. This paper attempts to examine the effect of social capital on suicide consideration based on individual-level data from Japan. Furthermore, the paper compares the effect of social capital between urban and non-urban areas. After controlling for various socio-economic factors, the major findings are that both individual-level social capital and social capital accumulated in onefs place of residence reduce the probability that one will consider suicide. After dividing the sample into urban and non-urban residents, the effect of social capital in onefs place of residence for urban residents is remarkably larger than for non-urban residents. In contrast, the effect of individual-level social capital disappears for urban residents, while the effect persists for non-urban residents. Overall, community-level social capital plays a more important role in deterring suicide for urban residents.
    Date: 2015–04
  8. By: Elias Carroni (CERPE, University of Namur); Simone Righi (University of Modena and Reggio Emilia)
    Abstract: We model the choices of a monopolist who faces a partially uninformed population of consumers. She aims at expanding demand by exploiting his (limited) knowledge about consumers’ social network. She offers rewards to current clients in order to induce them to activate their social network and to convince peers to buy the product sold by the company. The program is profitable provided that the monopolist faces a serious enough informational problem and that the cost of investment in the social network is not prohibitively high. Price for informed consumers is lowered by the introduction of the reward compared to the benchmark where no program is run. There are no effects on the price charged to uninformed consumers. The offer of bonuses affects individual incentives of informed people to share information, determining a minimal degree condition for the costly investment in the social network. The level of such threshold strongly depends on the distribution of connections in the social network. In random networks, roughly the most popular half of informed consumers invests, regardless of network density. On the contrary, in scale-free networks the monopolist faces a clear-cut decision between maximising margins (running a small referral program) and maximising demand (motivating many informed agents to communicate). The optimal choice depends on the probability of observing highly-connected individuals. In empirically observed scale-free networks, the first alternative would be preferred, in line with real-world markets.
    Keywords: social networks, monopoly pricing, network-based pricing
    Date: 2015–04
  9. By: Lata Gangadharan; Philip J. Grossman; Kristy Jones
    Abstract: We examine the extent to which individual donors are warm glow or altruistic givers and whether this distinction motivates giving decisions, particularly paternalism. Results from our experiment suggest that motivations for giving are heterogeneous, ranging from pure altruism to impure altruism to pure warm glow. Of 115 donors, in our setting 30 are purely altruistic givers, 36 are impure givers and up to 17 could be considered pure warm-glow givers. We find that donors are predominantly paternalistic, however the extent of paternalism depends on the donor’s motivations for giving, with pure warm-glow givers significantly less likely to be paternalistic.
    Keywords: Warm Glow; Altruism; Paternalism; Deconstructing giving
    JEL: C91 D64 H40
    Date: 2014–11

This nep-soc issue is ©2015 by Fabio Sabatini. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.